By Rick Palsgrove
Groveport Madison Schools are expected to face a revenue shortfall of $3 million by the end of fiscal year 2023.
According to the latest five year financial forecast, the district’s expenses are projected to exceed the district’s revenues by $18 million by fiscal year 2027 if additional revenue is not generated, according to the district’s latest five year forecast.
“The district would need to cut its fiscal year 2027 projected expenses by 16 percent in order to balance its budget without additional revenue,” said Groveport Madison Treasurer Felicia Drummey.
She added that the district’s cash balance is positive by the end of fiscal year 2023, but is expected to worsen by fiscal year 2027.
“A worsening cash balance can erode the district’s financial stability over time,” said Drummey. “A positive cash balance and having cash on hand gives us time to plan.”
According to the forecast, the district receives 42 percent of its revenue from property taxes, 40 percent from state funding, and 18 percent from other sources.
One reason for a decrease in revenue, according to Drummey, is because a change in state funding which distributes money where students attend school, not where they live. Also, even though property valuations are growing at almost 5 percent annually, revenue is at only 1.22 percent annually because a recent state law reduces millage to offset inflationary growth.
Salaries make up 52 percent of expenditures, benefits are23 percent, and services are15 percent.
According to Drummey, salary expenses increase an average of 7 percent annually. Benefits’ costs are also rising an average of 8.5 percent.
She noted spending has decreased annually overall since 2018 with one of the reasons for it being the effect of COVID closures reducing operating costs.
The district’s most recent operating levy was renewed by voters in 2019 and it is set to expire in 2024. That five-year levy was a “no new taxes” levy and it was the renewal of an existing levy.
The earliest the district’s existing five year renewal general operating levy can be placed on the ballot is November 2023. It is tentatively scheduled for the November 2024 ballot as that is latest date it can be approved for the district to start collecting money in 2025. Drummey noted the levy is collecting almost 2 mills less than when it was first approved in 2014 due to changes in state law.
“We have maintained control of our spending, but now are seeing the resumption of normal inflationary trends due to universal rising costs,” said Drummey. “We can use the winter months for strategic planning to determine action steps. Budget reductions are likely necessary as well as seeking additional levy revenue. We need to plan for how best to address overcrowding and modernization with our facilities.”